Egypt's Foreign Debt Decreases by $7.4 Billion in Q1 2024
In a recent report released by the central bank, Egypt's foreign debt has seen a significant decrease of $7.4 billion in the first quarter of 2024. This positive development comes after the country sold the development rights to prime Mediterranean land at Ras El-Hekma to the United Arab Emirates for a whopping $35 billion in late February.
The total foreign debt now stands at $160.6 billion, down from $168.0 billion in December and $164.5 billion in September. Egypt had increased its external debt fourfold since 2015 to fund various projects such as the construction of a new capital, infrastructure development, military purchases, and maintaining a strong currency.
In March, Egypt secured an $8 billion financial support package from the International Monetary Fund, committing to a free-floating currency. The IMF has already disbursed an initial $820 million, with the rest to be released in semi-annual installments until September 2026.
The central bank reported that 84.2% of Egypt's foreign debt is long term, accounting for 39.8% of the country's GDP, a decrease from 43% in December.
Analysis:
This news indicates positive progress for Egypt's economy as the country manages to reduce its foreign debt burden. The strategic financial decisions, such as selling development rights and securing IMF support, have helped stabilize the economy and improve the country's financial outlook. This development is crucial for investors and individuals alike, as it signals a more stable economic environment in Egypt, potentially leading to increased investment opportunities and overall economic growth.